New York owners, you need to roll up your sleeves and participate in the fight against this short-term rental ban!

October 5, 2010

Don't wait until the eleventh hour. Act now

A number of our readers have contacted us in the past couple of weeks asking (1) how they can fight New York’s short term rental ban; (2) should they join a trade association as well as (3) what trade association they should join?

As to whether they should join a trade association or a group to combat the ban, the answer is a resounding yes. As we all know, there is power in numbers. As to what trade association or group they should join, this decision is of a personal nature. One trade association might have goals and ideals that are better suited for some and not for others. We will do our best to provide you with information on trade associations that are committed to fighting the New York short-term rental ban. Stay posted. In the meantime please read our article titled “a short guide to joining a trade association.”

As always, we welcome any suggestions regarding how to fight this ban and/or how to better regulate the short-term rental industry.

A short guide to joining a trade association

Generally, a trade association participates in public relations activities such as advertising, education, as well as lobbying. The majority of trade associations are tax exempt, nonprofit organizations.

There are multiple benefits to be gained by joining a trade association:

Do conduct due diligence to ascertain the legitimacy of the trade association and do keep in mind that some trade associations may be better than others at furthering your interests as well as the interests of your profession in the long term.

You might want to ask the following questions to the trade association’s representative:

(1) Is the trade association a tax-exempt, nonprofit organization? (you can determine its status by either contacting the local office of the IRS or asking the trade association to provide you with its “Letter of Determination from the IRS”[1])
(2) Year when the association was incorporated?
(3) State where the association was incorporated?
(4) You might want to read the bylaws and other materials (newsletters, mission statement etc.) to better ascertain the goals and ideals of the trade association.
(5) How many members does the trade association have? What is the profile of a typical member (real estate professional, vacation rental property owner or operator etc.)?
(6) What are the requirements to join the association?
(7) What are the membership fees?
(8) Do they organize conferences or workshops? How frequently? On what topics?

Joining a trade association to fight a vacation rental ban or restriction.

If you want to join a trade association for a specific purpose (e.g. to fight a vacation rental ban or restriction implemented or contemplated in your community) do ask the association’s representative if any of the income of the trade association is/ will be devoted to this end (Percentage of the income of the trade association used to this end annually, etc.?).

You should also ask what means will be used in order to fight the ban or restriction: Lobbying? Legal action? Both? Don’t be afraid to ask for specifics.

The short-term rental ban becomes effective in New York on May, 1 2011. The clock is ticking and it is more important than ever for all owners to come together to fight this ban.

Let us not forget what Sarra Hale-Stern, the district office director for Senator Krueger, a co-sponsor of the legislation, asserted in an interview: “[t]he bill makes it clear that even one transient unit in a residential building is not legal.” [2]

Having the agency in charge of enforcing the new legislation go after you if you rent on a short-term basis is not the only concern you should have. If an owner does rent his co-op apartment for less than thirty days, he will be found in breach of the proprietary lease (and will bear the risk of having his lease being terminated) as proprietary leases must comply with applicable zoning laws, building codes and other rules and regulations of government bodies. New York owners, you need to roll up your sleeves and participate in the fight against this short-term rental ban. Join a trade association. Let your voice be heard.

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[1] Donations to tax exempt, nonprofit trade association are not tax deductible. However, a company may deduct them as business expenses if they are necessary for running the business. Membership dues that merely cover the cost of privileges or benefits received by the donor are not deductible. However, membership dues that actually constitute a contribution for which the donor receives little or no benefit of monetary value in return are deductible. The trade association should be able to answer any and all questions you have regarding the possibility of deducting your dues and other contributions as an ordinary and necessary business expenses.
[2] http://www.crainsnewyork.com/article/20100702/FREE/10070995

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It’s about time we took some direct action. Can someone provide a phone number or a contact of any organization worth joining or supporting. I would like to know the status of Senator Golden’s bill and when it may be voted on. Perhaps we should make an effort to formally protest the new law somehow?

This Bill may be unconstitutional or perhaps illegal if challenged. It can be a stretch but id does violate anti-trust laws and inhibit competition. No one person will have the resources to challenge this new law but time is wasting and we need to organize. How can we set a meeting? Perhaps at least talk to one another to put together a strategy.

Thank you for the rallying of preventing such an egregious act as passing this law. I dont believe it is the citizens’ responsibility to protest this unconstitutional and immoral act. According to my recollection, a ban such as this is a violation of anti trust and the matter should be taken up with the Justice Department. In my opinion this is just an over zealous Mayor (Bloomberg) trying to protect big hotels and travel conglomerate corporations. I would even go as far as to say that some “behind the door” negotiation was conducted between the Mayor and the Mega hotels in NYC to price fix. Obviously there is no other real reason for our mayor to be so concerned with competition. If I were a large hotel in Manhattan wanting to charge a nightly rate of $500.00 +++ then I would want to eliminate a little mom and pop bed and breakfast charging $150 per night. Its basically contrary to the American philosophy of free market economy. The charade needs to end now!